$BBRY – Whilst Samsung Panic Chen’s Strategy Is Validated

Press.. And Run Around Screaming...
Press.. And Run Around Screaming

If there’s one thing ALL the major phone manufacturers have got spectacularly wrong in the last 12 months it’s that the great upgrade gravy train would just keep on rocking. That their customers, blinded by brand loyalty, would forever rush to shell out on the next big thing.

To be fair, the first to feel a change in the wind was BlackBerry in 2013. Whilst plenty of BlackBerrians jumped ship in 2012, many were hanging on for BB10 and rushed to grab the Z10 when it came out and subsequently the Q10 (which came out far too late afterwards). Problem was, there wasn’t enough of them as the company had probably the world’s worst marketing plan to tell the world how great the new phones were.

They just EXPECTED users to work it out for themselves. After all, they always used to. And everyone was waiting for it, right?

Wrong. No one knew it was happening.

And the resultant mess left loads of unsold phones that needed shifting, a change in board and a huge change in strategy.

Not learning from this at all then came Apple. Yes, big initial sales of the new phone leading to a slowdown and nowhere near what they actually need – leading to loads of unsold phones that need shifting. And they seem to have pretty much given up on that one as they also managed to break a load of old ones in the process. Still, at least that left them with something to do with the old stock – give it away – as we reported here: iOS7 Bricked Your Phone – – Are You Going To Fall For This Too?

So, lastly then of the big launches came the SG5. Again, not learning from previous experience Samsung threw their chips down as we reported here: Samsung ‘Pins Profit Hopes On New Galaxy S5′ which, as it has turned out, seems to have worked out to be a bit of a mistake, to say the least.

For starters, the phone was shoved out of the door with a rather key component a bit on the faulty side Samsung Galaxy 5 Camera ‘Not Fit For Purpose’ which didn’t exactly inspire confidence and then rumours began circulating about poor sales (US carriers giving them away free is NOT a good sign).

Now, according to Phone Arena, there are signs of panic over the lack of SG5 sales – yes, large initial sales again by ‘early adopters’ but those gravy train upgrades just AREN’T HAPPENING which will lead, inevitably, to loads of unsold stock and a whacking great dent in the budget…

On Wednesday, Samsung pushed out the top man on the mobile design totem pole and gave him a new position running the company’s design team. While a specific reason for the move wasn’t mentioned, there is talk that the Korean based manufacturer is unhappy with the sales performance of its new flagship phone. It could be that the expectations at Samsung are high. After all, reports indicate that the Samsung Galaxy S5 is outselling last year’s Samsung Galaxy S4.

Still, it should be noted that last year, Samsung announced that it had sold 10 million units of the Galaxy S4 just 26 days after launch. Today is the 28th day since the Galaxy S5 was launched, and Samsung has been mum on its sales.

Earlier today, we told you about a report from mobile ad network site Chitika, that showed the new flagship accounting for 4.3% of Samsung’s U.S. web traffic 25 days after launch. That was more than double the 2% of Sammy’s web traffic that the Galaxy S4 commanded 25 days after its launch. The IP67 certification, the built in heart rate monitor and the embedded fingerprint scanner are some of the changes in this year’s model.

Yet, despite the positive start that the phone has had, there is a feeling of unease at Samsung. While the Galaxy S5 is surely outselling the HTC One (M8), the latter model appears to have a higher quality build. According to Nick Spencer at ABI Research, Samsung isn’t really looking at sales figures. Instead, the manufacturer is focusing on negative feedback.

“The design has been consistently commented on for the last two or three years, especially the lack of high-end materials. The Galaxy S family is still successful, so Samsung must be doing something right. But the fact is that the design doesn’t have a quality feel.”-Nick Spencer, ABI Research

There are rumors that Samsung will be pushing out a premium version of the Galaxy S5 with a metal body, and a 5.2 inch screen with QHD resolution. Will this help Samsung brass stop listening to its critics and focus more on the sales of the line? Or is there a bit of jealousy in the Samsung boardroom toward the build quality of the HTC One (M8)?

So, in the midst of all this what has John Chen been up to?

Firstly he did a deal with Foxconn meaning that BlackBerry could never again be left with piles of unsold phones.

Then he targeted the low hanging fruit on the profit tree. A low cost device but launched in ONE COUNTRY ONLY.

A country that, funnily enough, has a large BlackBerry community as it is.

And therefore it’s a lot cheaper to market heavily to one country than scatter your efforts across the board and a lot cheaper to market to a receptive audience.

Overall sales of the Z3 are unknown at this time, but pre-orders, if any indicator at all, are very, very good indeed.

And a success in Indonesia then allows a ramp up in other countries, very quickly I suspect, but all done from the profits of the first offer and all relatively risk free.

Meanwhile, the Enterprise section of the company is running full steam ahead, BBM is growing very, very fast indeed (and bringing in revenue) and the OS development team are pulling crackers out of the hat in 10.3 just from the previews we’ve seen alone.

Which all bodes EXTREMELY well for the future, as iOS and Android are starting to look very old and tired in comparison.

So, whilst Apple and Samsung flounder about like gamblers chasing their losses, could it be that from painful necessity BlackBerry are way ahead of the curve here?

I think that’s becoming obvious.

Source: Phone Arena

EDIT: More wonderment at the lack of SG5 sales here: Is Samsung Scared That The Galaxy S5 Might Be A Failure?


Bigglybobblyboo is a legend almost nowhere at all. He is a founder member of UTB and spends his spare time taking out his anger at the world with a fishfork and a spatula. He is also a Cribbage Master, having won 1 fight online as the other guy refused to turn up out of fear for his life.

  • ital1

    You make a very compelling argument. What I also like about Chen’s strategy is that the focus isn’t simply on phones; the phone plays a part of the equation. QNX Cloud, QNX and automotive, BES, vertical sectors such as Health, Finance, Government, Regulated industries BBM monetization, eBBM, oh and yes phones.

  • Bigglybobblyboo

    Exactly. Diversification and focus.

  • shanerredflag

    Great read…I also like that